Summary
In a recent statement by CEO Lars Wingefors, it was revealed thatEmbracer Groupplans to continue its “restructuring” model of cutbacks to prioritize shareholders above all else. Having just announcedeven more layoffs for Embracer Group, this latest statement by the CEO has left many fans in shock.
Founded in 2011, Embracer Group is a Swedish video game and media holding company that has recently gone through a number of financial woes. Since amulti-billion dollar deal for Embracer Groupfell through, the company has laid off thousands of employees, shut down multiple development studios, and canceled numerous in-development games. Audiences were struggling to comprehend the reasoning behind these decisions, but this statement by Wingefors has provided a clear answer.
While many companies bear legal and financial obligations to satisfy investors, Embracer Group CEO Lars Wingefors was fully transparent about the company’s prioritization of shareholders in its decision-making. As first reported byIGN, Wingefors noted in a prepared statement that Embracer will always work to maximize shareholder value. Embracer Group is headquartered in Karlstad, Sweden and is thus subject to Swedish corporate governance laws, which allot shareholders almost equal power to a corporate Board of Directors. As such, Embracer Group’s Board and CEO may feel a stronger legal obligation to prioritize the wants and needs of its shareholders. However, fans have been reeling from thehundreds of staff layoffs at Embracerand the cancelation of almost 30 games during the second half of 2023, and this statement from Wingefors has already sparked outcry.
“Our overruling principle is to always maximize shareholder value in any given situation.”
- Lars Wingefors, CEO Embracer Group
Embracer Group CEO Statement Met With Backlash
People within the gaming industry have shown not only disappointment but anger towards Embracer’s cutbacks, and these sentiments have been amplified following the shareholder comment from Wingefors. Some pointed out that CEOs and other executives could always opt to take pay cuts instead of resorting to layoffs, while others noted unrealistic exponential growth models as a cause for pressure from shareholders. Many fans feel that Embracer Group’s current business model is unsustainable and will only continue to flounder, resulting in a constant string of cutbacks. The seemingly neverendinglayoffs at Embracer Group, along with the dozens of canned games, have left many audiences furious with Embracer and now Wingefors. Whether the cutbacks and cancelations will satisfy shareholders remains to be seen, but Embracer Group is fully prepared to continue its “restructuring” plans.
At the end of the day, businesses need to make money and remain profitable, though the manner in which companies achieve this varies drastically. Many have recently pointed to the time whenNintendo CEO Satoru Iwata took a massive pay cutto protect his employees and preserve the company’s finances, which has long been considered a favorable move in the eyes of consumers. As shareholders continue to influence industries, though, audiences are skeptically waiting to see if Embracer Group and others have been making the right moves.
